from the some-good,-some-bad dept

For many years, we've been covering the story of Myriad Genetics, the biotech company that has a test for the BRCA1 and BRCA2 genes (often an indicator of a higher risk for breast cancer). The company argued that because of its patent on those genes, no one else could test for those genes. Back in 2013, the Supreme Court did the right thing and finally rejected the concept of gene patents, despite years of the USPTO granting such patents. As the court noted, allowing gene patents created a perverse situation in which a single company could have the exclusive right to isolate a person's own genes -- and that's just not right.

But Myriad Genetics did not give up easily. Just a month after the Supreme Court ruling it sued a bunch of competitors over a different set of gene patents, insisting that the Supreme Court had really only struck down the two in question. Those lawsuits did not go well, as Myriad lost again and again. At this point, it's only choice was to go back to the Supreme Court, where it was obviously going to get a pretty big smackdown -- so Myriad has now admitted that it will not pursue an appeal effectively ending this latest round of cases (after costing those other testing centers tons of money to defend themselves).

As the ACLU notes, this news is great, but there's also some bad news. Just as Myriad is finally coming to terms with what the Supreme Court actually said a year and a half ago, the US Patent and Trademark is quietly opening the door back up to gene patents:

In response to severe criticism by industry groups, patentholders, and patent attorneys, the Patent Office issued new guidance in December that watered down the standard for determining whether something is an unpatentable product of nature. It said that differences in structure or function could allow companies to patent things based in nature. Under this test, if a surgeon removed a kidney from one's body in order to transplant it, the surgeon could argue that she should be able to patent it because it no longer has the same structure as in the body since its blood vessels were cut. The kidney, of course, would be intended to function just as it has prior to being removed in the body that receives it.

The Supreme Court has long rejected this view. For example, in 1931 the court said that a fruit treated with a preservative in its rind could not be patented, because while it has a different structure, its uses are still the same – to be eaten. The applicant could have sought a patent on a new preservative it developed, but not on the fruit itself.

In other words, the ugly head of gene patents may be about to come back alive, despite the Supreme Court killing it off a couple years ago. However, there's still a chance the USPTO will reconsider:

The public has an opportunity to weigh in on this latest guidance. The Patent Office is seeking comments until March 16. In its next revision of the guidance, the Patent Office must require differences in both structure and function when assessing patent applications. Otherwise, the public will bear the consequences when another company, like Myriad, wields its exclusive rights on nature to stall medical and scientific advancement.

from the not-necessarily-good-news dept

Another Supreme Court ruling... and another smackdown of CAFC, the Appeals Court for the Federal Circuit that handles all patent appeals. This regular smackdown of CAFC by the Supreme Court has become such a recurring story that it would almost be surprising if the Supreme Court took a patent case to do anything but smackdown CAFC. The key issue here is that the Supreme Court basically has taken away CAFC's powers to review a patent directly to determine if the patent itself is valid or not. Instead, it can only review the district court's findings, to determine if there was an obvious error by those district courts in handling claim construction. While this takes away power from CAFC, it actually is seen as beneficial to patent trolls, since (especially lately), the now-chastened CAFC has suddenly been rejecting patents left and right. But that might stop now as the CAFC's ability to do that is now greatly limited.

The specific case is Teva Pharmaceuticals v. Sandoz, and the 7-2 ruling argues that appeals courts are only supposed to set aside "clearly erroneous" findings of fact by the district court, and that means that the CAFC should not do "de novo" review of a patent (i.e., from scratch):

Federal Rule of Civil Procedure 52(a)(6) states that a court of appeals “must not . . . set aside” a district court’s “[f]indings of fact” unless they are “clearly erroneous.” In our view, this rule and the standard it sets forth must apply when a court of appeals reviews a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim....

Even if exceptions to the Rule were permissible, we cannot find any convincing ground for creating an exception to that Rule here. The Rules Advisory Committee pointed out that, in general, exceptions “would tend to undermine the legitimacy of the district courts . . . , multiply appeals . . . , and needlessly reallocate judicial authority.”

The ruling further notes that the CAFC can still do "de novo review" of the lower court's "ultimate interpretation of the patent claims," but just not the fact finding portion. Still, where this is concerning is that, for all the problems with CAFC judges generally loving patents, district court judges are unlikely to have much understanding of the underlying issues that go into a patent. And thus, the fact finding part of the process will just involve piling on experts, and the side willing to spend more on experts who will claim its interpretation of the claims is right will win, and the CAFC can no longer do much to challenge that.

Unlike recent CAFC smackdowns that were of the 9-0 variety, this one had two dissenting Justices: Thomas and Alito. Their dissent is a worthwhile read also. And it focuses on the somewhat fuzzy area in between what is a finding of fact and one of law. And it notes that patents are not that different from laws, and as such the claim construction aspect shouldn't be seen so much as a finding of fact as a finding of law. Specifically, a patent is effectively a law against others being able to use a certain invention. And thus, according to the dissent, it should be treated like a law, subject to specific interpretations that can be reviewed by the appeals court:

Because they are governmental dispositions and provide rules that bind the public at large, patent claims resemble statutes. The scope of a patent holder’s monopoly right is defined by claims legally actualized through the procedures established by Congress pursuant to its patent power. Thus, a patent holder’s actual intentions have effect only to the extent that they are expressed in the public record....

Moreover, because the ultimate meaning of a patent claim, like the ultimate meaning of a statute, binds thepublic at large, it should not depend on the specific evidence presented in a particular infringement case. Although the party presentations shape even statutory construction, de novo review on appeal helps to ensure that the construction is not skewed by the specific evidence presented in a given case.

Furthermore, the dissent reasonably worries that this will now open up a huge opportunity for patent trolls to argue where the line is between fact and law, creating quite a bit of new litigation:

Perhaps the majority is correct that “subsidiary factfinding is unlikely to loom large in the universe of litigated claim construction.” .... But I doubt it. If this case proves anything, it is that the line between fact and law is an uncertain one—made all the more uncertain by the majority’s failure to identify sound principles for the lines it draws. The majority’s rule provides litigants who prevail in district court a significant opportunity and incentive to take advantage of this uncertainty by arguing on appeal that the district court’s claim construction involved subsidiary findings of fact. At best, today’s holding will spawn costly—and, if the majority is correct about the frequency with which these evidentiary determinations make a difference, meritless—collateral litigation over the line between law and fact. We generally avoid any rule of judicial administration that “results in a substantial expenditure of scarce judicial resources on difficult questions that have no effect on the outcome of the case,” ..., and there is no reason to embrace one here.

So while it's not surprising that CAFC received another Supreme Court smackdown, it seems like perhaps this time, it may create more problems, rather than cleaning up a mess.

from the took-'em-long-enough dept

It looks like the Ultramercial saga may finally be ending. As we've been covering for many years, Ultramercial held a patent (7,346,545) on watching an ad to get access to content, and it sued lots of companies. While a lower court rejected the patent, CAFC (the appeals court for the Federal Circuit, which handles all patent cases) overturned that ruling. The key issue: is something patentable if you take a common idea and just add "on the internet." CAFC said yes. The Supreme Court asked CAFC to try again following its own ruling in the Mayo case (which said you couldn't patent medical diagnostics). But CAFC still found the patent to be valid. Finally, earlier this year, following the Alice ruling, the Supreme Court gave CAFC a third try to get it right.

It seemed rather obvious to us that it was the Supreme Court saying, "Hey, would you reject this patent already?" and finally, CAFC got the message. On the third try, CAFC dumped the patent as invalid. More specifically, it goes all the way back to the original district court ruling, allowing the patent to be declared invalid on a motion to dismiss (i.e., before going through the massive expense of a big trial). This is very helpful, since it gives people sued for patents a path to success that won't put them too deep in the hole financially. Traditionally, courts were reluctant to toss out patents that early in the process, and patent holders relied on that fact, knowing that the legal bills for anyone they sue will be astronomical, even on a bogus patent. Now, however, courts can toss out those patents much more quickly. CAFC says so. Check out the full ruling:

We conclude that the limitations of the ’545 claims do
not transform the abstract idea that they recite into
patent-eligible subject matter because the claims simply
instruct the practitioner to implement the abstract idea
with routine, conventional activity. None of these eleven
individual steps, viewed “both individually and ‘as an
ordered combination,’” transform the nature of the claim
into patent-eligible subject matter. See Alice, 134 S. Ct.
at 2355 (quoting Mayo, 132 S. Ct. at 1297, 1298). The
majority of those steps comprise the abstract concept of
offering media content in exchange for viewing an advertisement.
Adding routine additional steps such as updating
an activity log, requiring a request from the consumer
to view the ad, restrictions on public access, and use of the
Internet does not transform an otherwise abstract idea
into patent-eligible subject matter. Instead, the claimed
sequence of steps comprises only “conventional steps,
specified at a high level of generality,” which is insufficient
to supply an “inventive concept.”

There's an even more interesting concurring opinion from Judge Haldane Mayer, that I kind of wish was the full opinion. It points out that patents that don't "promote the progress" are unconstitutional.

The Constitution’s Intellectual Property Clause is at
once a grant of power and a restriction on that power.... Unless we are to assume that the
constraints explicit in the Intellectual Property Clause
are mere surplusage, we are bound to ensure that the
patent monopoly serves “[t]o promote the Progress of
Science and useful Arts,”...
“This is the standard expressed in the Constitution and it
may not be ignored.”

Mayer's ruling is the one that also clearly lays out why letting courts invalidate patents so early on is so important.

From a practical perspective, addressing section 101
at the outset of litigation will have a number of salutary
effects. First, it will conserve scarce judicial resources.
Failure to recite statutory subject matter is the sort of
“basic deficiency,” that can, and should, “be exposed at the
point of minimum expenditure of time and money by the
parties and the court,”....

Second, resolving subject matter eligibility at the
outset provides a bulwark against vexatious infringement
suits. The scourge of meritless infringement claims has
continued unabated for decades due, in no small measure,
to the ease of asserting such claims and the enormous
sums required to defend against them....

Finally, and most importantly, turning to section 101
at the outset protects the public. See Cardinal Chem.,
508 U.S. at 101 (emphasizing the public interest in
preventing the “grant [of] monopoly privileges to the
holders of invalid patents” (footnote omitted)). Subject
matter eligibility challenges provide the most efficient
and effective tool for clearing the patent thicket, weeding
out those patents that stifle innovation and transgress the
public domain. As a general matter, trial courts have
broad discretion in controlling their dockets and in
determining the order in which issues are to be
adjudicated. But the public interest in eliminating
defective patents is an “even more important
countervailing concern[],” Cardinal Chem., 508 U.S. at 99,
which counsels strongly in favor of resolving subject
matter eligibility at the threshold of litigation.

Furthermore, the opinion notes that courts should get away from simply presuming patents are valid:

Indeed, applying a presumption of eligibility is
particularly unwarranted given that the expansionist
approach to section 101 is predicated upon a
misapprehension of the legislative history of the 1952
Patent Act. Those who support a “coarse filter” approach
to section 101 often argue that the Act’s legislative history
demonstrates that Congress intended statutory subject
matter to “include anything under the sun that is made
by man.” See, e.g., AT&T Corp. v. Excel Commc’ns, Inc.,
172 F.3d 1352, 1355 (Fed. Cir. 1999). Read in context,
however, the legislative history says no such thing. See
Mayo, 132 S. Ct. at 1303–04. The full statement from the
committee report reads: “A person may have ‘invented’ a
machine or a manufacture, which may include anything
under the sun that is made by man, but it is not
necessarily patentable under section 101 unless the
conditions of the title are fulfilled.” H.R. Rep. No. 1923,
82d Cong., 2d Sess., at 6 (1952) (emphasis added). Thus,
far from supporting an expansive approach to section 101,
the relevant legislative history makes clear that while a
person may have “invented” something under the sun, it
does not qualify for patent protection unless the Patent
Act’s statutory requirements have been satisfied.

Good stuff all around... and very different from the CAFC of the past.

from the fingers-crossed dept

Back in May, the Court of Appeals for the Federal Circuit (CAFC), long famous for messing up patent law, decided to take a short break and mess up copyright law as well, by declaring APIs copyrightable (the case ended up before CAFC instead of the 9th Circuit because it originated as a patent case, even though all the patent issues were gone). The district court had ruled otherwise, and that judge, William Alsup, had actually gone into great detail to explain why copyright shouldn't apply to APIs. Alsup had learned to code Java to better understand the case, and you could basically tell from his ruling that he was quite worried that appeals court judges wouldn't take the time to truly understand the issues at play. He was right. Making APIs copyrightable is bad news for innovation in a variety of ways.

But, of course, CAFC is not the final stop in the line (even if some patent trolls wish it were). As was fully expected, Google has now asked the Supreme Court to hear an appeal on the case. Google's petition is a good read highlighting the "disarray" in the various different circuits about whether or not copyright law applies to APIs. The law itself (Section 102(b)) is pretty explicit: "In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work." Many of us clearly think that APIs fit under this as a system or method of operation. But, others disagree.

Some courts follow the statute’s plain
meaning, holding that Section 102(b) precludes
copyright protection for all systems or methods of
operation, including those in computer programs.
See, e.g., Lotus, 49 F.3d at 815. Like the Federal
Circuit, however, other courts have rejected the
statutory text and held that Section 102(b) is merely
a reminder of the dichotomy between ideas (which
are not copyrightable) and expressions of ideas
(which generally are). See, e.g., Whelan Assocs., Inc.
v. Jaslow Dental Lab., Inc., 797 F.2d 1222, 1234 (3d
Cir. 1986). In those courts’ view, a “method of
operation” embodied in a computer program is
copyrightable so long as its creator could have
designed it in different ways.

Having shown the circuit split to help entice the Supreme Court to hear the case, Google then explains why it's simply wrong to interpret the law to say that APIs are covered by copyright.

The Federal Circuit’s error is confirmed by the
extent to which it would eliminate a fundamental
distinction between patent and copyright law—and
thus allow copyright to be used as an end-run around
the limits on patent protection, including this Court’s
recent decisions on patent-eligibility.

Basically, you may be able to patent a system and method (as many patents themselves note in their titles), but it shouldn't be copyrightable.

While the Supreme Court has a history of being pretty bad on copyright law, it has been pretty good (especially lately) on patent law -- in particular smacking down CAFC -- and the Google filing plays up to that fact, arguing that this is just another case of CAFC interpreting the law incorrectly.

The Federal Circuit’s error is all the more
glaring because it is essentially the same error for
which this Court has repeatedly reversed the Federal
Circuit in patent cases. The court of appeals
criticized the district court for confusing “the
threshold question of what is copyrightable—which
presents a low bar—and the scope of conduct that
constitutes infringing activity.” App. 17. It then
transformed Section 102(b)’s limits on copyright
eligibility into just one of several factors to be
considered as part of a fair-use defense....

The Federal Circuit had similarly held that the
limits on patent eligibility are minimal and that
other requirements of the Patent Act do the real
work in limiting monopoly protections. See, e.g.,
Research Corp. Techs., Inc. v. Microsoft Corp., 627
F.3d 859, 869 (Fed. Cir. 2010) (referring to Section
101 of the Patent Act as a “coarse eligibility filter”).
This Court has repeatedly corrected that
misperception in recent years, stressing the
importance of enforcing Section 101’s limits on
patentable subject matter—including for software-related patents. See, e.g., Alice, 134 S. Ct. 2347;
Ass’n for Molecular Pathology v. Myriad Genetics,
Inc., 133 S. Ct. 2107 (2013); Mayo, 132 S. Ct. 1289;
Bilski v. Kappos, 130 S. Ct. 3218 (2010). But the
Federal Circuit would now eviscerate the analogous
limitation on copyright eligibility for some of the
same types of works.

from the make-it-stop dept

Back in 2004, when I first read the book Innovation and Its Discontents, I was convinced that the Court of Appeals for the Federal Circuit, better known as CAFC, or the "patent appeals court" was a huge part of the problem with the patent system. It was the special court that had been set up in the early 80s to handle all patent appeals, based on the totally misplaced notion that because patent issues were so technical, regular appeals courts wouldn't be able to handle the nuances. What we got instead was a court that became "patent specialists" in that they spent much of their time with the patent bar -- who tended to be lawyers who profited handsomely from an ever expanding patent law. It didn't help that one of the original CAFC judges was Giles Rich, a former patent attorney who almost single-handedly wrote the Patent Act of 1951. Rich more or less made it his lifetime goal to expand the patent system to cover "everything under the sun made by man," and he came close to succeeding.

In fact, some important research pointed out that the structure of the court means that it's really designed to only expand what is patentable, and never to contract it.

Two years ago, Tim Lee had a fantastic expose on CAFC and how it turned patents into a megabusiness by expanding them massively (often ignoring the Supreme Court to do so) and had become way too chummy with the patent bar. It appears that others are catching on as well. Over at the Cato Institute, Eli Dourado has a good article discussing just how "the patent bar captured a court and shrank the intellectual commons." It's a good read, going back over much of the territory that Lee and others have covered previously, but doing it in a nice succinct fashion. It also has a nice empirical summary of just how broadly the CAFC expanded patent law:

The creation of the court has significantly altered the law. Using a dataset of district and appellate patent decisions for the years 1953–2002, economists Matthew Henry and John Turner find that the Federal Circuit has been significantly more permissive with respect to affirming the validity of patents. They estimate that patentees are three times more likely to win on appeal after a district court ruling of invalidity in the post-1982 era. In addition, following the precedents set by the Federal Circuit, district courts have been 50 percent less likely to find a patent invalid in the first place, and patentees have become 25 percent more likely to appeal a decision of invalidity.

With patents more likely to be upheld in the Federal Circuit era, the incentive to patent has increased. Bronwyn Hall finds a highly significant structural break in patent applications occurring between 1983 and 1984. The number of patents granted by the U.S. Patent and Trademark Office also increased, from 63,005 in 1982 to 275,966 in 2012—a quadrupling of the rate in only 30 years.

This is important, in part, because one of the suggestions that's been floated to "fix" the problems of the patent system is actually to create another specialized patent court, this time at the district court level, with the claim being that this would stop things like the rush to bring patent lawsuits in east Texas, or unsophisticated juries deciding big patent cases. Except that, as we've pointed out, this would just exacerbate the problem.

How long will it take the Federal Circuit to overrule this inexplicable nonsense? The novice reader may find that question to be ignorant, since the Supreme Court is the highest court of the United States. Those well acquainted with the industry know that the Supreme Court is not the final word on patentability, and while the claims at issue in this particular case are unfortunately lost, the Federal Circuit will work to moderate (and eventually overturn) this embarrassing display by the Supreme Court.

There is, of course, some hope that maybe things are actually changing. The number of cases in which the Supreme Court has smacked down the CAFC grow each year, and in some of the more recent ones the Supreme Court's impatience with CAFC and its inability to properly interpret patent law have become clear. On top of that, CAFC is under new management, due to an ethics scandal involving the former chief judge. And the most recent few decisions have suggested that, perhaps, finally, CAFC is changing and getting the message.

That said, it still makes no sense at all to have a specialized court like CAFC for patent appeals. Like nearly all other kinds of cases, patent lawsuits should go up through the circuit courts. There, those courts will be more likely to actually listen to the Supreme Court, rather than think they can "overrule" the Supreme Court -- and on difficult cases there's more likely to be a circuit split where different opinions are discussed. And, most importantly, it means that the patent bar can't so aggressively lobby just a small group of "friendly" judges that they see over and over and over again.

from the b-i-n-no-go dept

Another day, another story of stupid software patents getting stomped out of existence thanks to the Supreme Court's Alice v. CLS Bank ruling. As we've been noting, this ruling is looking like it's going to invalidate a ton of software patents (and that's a good thing). The latest one dumped was an attempt to patent bingo online. Yes, bingo. The lower court had already rejected the patent using previous Supreme Court rulings against patenting "abstract ideas." Now, with the Alice ruling in hand, the Appeals Court for the Federal Circuit (CAFC) completed the stomping out of the bingo patent. They didn't waste much time on it either, pushing out a compact 7-page ruling. It makes short work of Planet Bingo (yes, that's the patent holder's name) and its claim that the patent actually is inventive and new:

Planet Bingo argues that the patents recite "significantly more" than an abstract idea because the invention
includes “complex computer code with three distinct
subparts.” ... We disagree. The ’646
and ’045 patents do not claim the “accounting program,”
“ticket program,” and “verification program” that Planet
Bingo identifies in its briefs. Instead, the claims recite a
program that is used for the generic functions of storing,
retrieving, and verifying a chosen set of bingo numbers
against a winning set of bingo numbers. And, as was the
case in Alice, “the function performed by the computer at
each step of the process is ‘[p]urely conventional.’”

Planet Bingo really pushed hard on the ridiculous idea that because lots of numbers were involved, this was patentable subject matter. CAFC didn't buy it.

Planet Bingo argues that “in real world use, literally
thousands, if not millions of preselected Bingo numbers
are handled by the claimed computer program,” making it
impossible for the invention to be carried out manually.... But the claimed inventions not require as much. At most, the claims require “two
sets of Bingo numbers,” “a player,” and “a manager.” ... We need not, and do not, address whether a
claimed invention requiring many transactions might tip
the scales of patent eligibility, as the claims fall far short
of capturing an invention that necessarily handles "thousands, if not millions” of bingo numbers or players.

It's a new era for software patents, and it looks like many of them are invalid. It's also a new era for CAFC, which both has new leadership... and (finally) some pretty clear instructions from the Supreme Court to dump these broadly written software patents. It may take a few years for the system to clear out, but this is going to be tremendously helpful for companies that actually innovate, rather than those that just try to shove tollbooths in the innovative process.

from the fighting-back dept

Last year, there were a few stories concerning a really despicable (more than usual) patent troll called MPHJ Holdings. Joe Mullin, over at Ars Technica, had dug deep into the details, finding a bunch of shell companies all sending demand letters to various small companies demanding around $1,000 per employee for using a network-connected scanner that includes a "scan to email" feature (i.e., pretty much any scanner on the market today). There were all sorts of sketchy things about MPHJ, and it was pretty clear that it and all its shell companies were effectively shaking down small businesses. It was so egregious that Vermont's Attorney General sued the company, claiming that it was engaged in "unfair and deceptive acts" with its threat letters.

Over the last year, MPHJ has fought hard to get the case out of a Vermont state court and into a federal court, arguing that it was a patent case (which is covered by federal law). The federal district court sent it back to the Vermont state court, saying that it's not really a patent case at all, but about the company's threat letters. Specifically, it stated:

"the State is targeting bad faith conduct irrespective of whether the letter recipients were patent infringers."

MPHJ appealed this ruling to CAFC, the appeals court that handles all patent cases (and is somewhat notorious for constantly expanding patent law through its decisions). Last week, however, CAFC rejected MPHJ's appeal, without even getting into the issue of whether or not this is a patent case. Instead, it simply noted that the law says appeals courts can't review orders remanding a case to a state court. Case closed, no jurisdiction. Pack your bags for Vermont, MPHJ lawyers.

Of course, the more important case involving MPHJ is the one in which it brazenly decided to sue the FTC for investigating its actions. The decision on that case could come at any time. You never can tell how a court will rule, but the odds are not likely to be in MPHJ's favor on that one either...

from the couldn't-have-happened-to-a-nicer-bunch dept

We've written a few times about Vringo, a patent troll (which got its name, and public stock status, from a reverse merger with a basically defunct public "video ringtone" company and a pure patent troll called I/P Engine). The company was using some very broad patents (6,314,420 and 6,775,664) to claim that Google and Microsoft were infringing based on how their search ad programs worked. In effect, Vringo, whose patents were at one time associated with Lycos, was trying to pull off another Overture move -- patenting a basic idea for search ads, and then cashing in from Google actually making it work. The case took a slight detour into the bizarre when Microsoft not only settled with Vringo for $1 million -- but also with a promise to pay 5% of whatever Google had to pay.

While the original ruling against Google in 2012 had the jury reject Vringo's request for nearly $700 million, and giving it "just" $30 million, in February of this year, a judge magically decided that 1.36% of all of Google's AdWords revenue (which is most of its revenue) belonged to Vringo.

Between February and now, however, something wonderful happened. That something wonderful was the Supreme Court's ruling in CLS Bank v. Alice. As we noted at the time, depending on how you read it, it certainly could be interpreted that nearly all software patents were invalid -- even as the ruling itself insisted that wasn't the case. Still, the early returns are promising, with CAFC (apparently finally getting the message) starting to smack down software patents.

So with the Vringo patents before CAFC, it appears they got the Alice treatment, with CAFC tossing them out as totally invalid for patenting a basic concept. The ruling focuses on how the ideas were obvious to those skilled in the art based on (a rather large amount of) prior art:

As the asserted patents themselves acknowledge, however, search engines, content-based filtering, and collaborative filtering were all well-known in the art at the time of the claimed invention.... The record is replete, moreover,
with prior art references recognizing that content-based and collaborative filtering are complimentary techniques
that can be effectively combined. The WebHound reference explains that “content-based and automated collaborative filtering are complementary techniques, and the
combination of [automated collaborative filtering] with
some easily extractable features of documents is a powerful information filtering technique for complex information spaces." ... The Fab reference likewise
notes that “[o]nline readers are in need of tools to help
them cope with the mass of content available on the
World-Wide Web,” and explains that “[b]y combining both
collaborative and content-based filtering systems,” many
of the weaknesses in each approach can be eliminated.... Similarly, the Rose patent, which was filed in
1994 by engineers at Apple Computer, Inc., states that
“[t]he prediction of relevance [to a user’s interests] is
carried out by combining data pertaining to the content of
each item of information with other data regarding correlations of interest between users."

The ruling laughs off Vringo's claims that its patents took things a step further by combining two ideas, pointing out that this was quite obvious at the time.

But the concurring opinion by Judge Mayer calls out the Alice ruling and the fact that this stuff isn't patentable in the first place:

Because the claims asserted by
I/P Engine, Inc. (“I/P Engine”) disclose no new technology,
but instead simply recite the use of a generic computer to
implement a well-known and widely-practiced technique
for organizing information, they fall outside the ambit of
35 U.S.C. § 101...

[....]

I/P Engine’s claimed system is merely an Internet iteration of the basic concept of combining content and
collaborative data, relying for implementation on “a
generic computer to perform generic computer functions.” ...

Moreover, the scope of the claimed invention is staggering, potentially covering a significant portion of all
online advertising. I/P Engine’s asserted claims fall
outside section 101 because their broad and sweeping reach is vastly disproportionate to their minimal technological disclosure.

That last line is a fun one.

Either way, it looks like the writing may be on the wall for software patent trolls. Vringo's stock collapsed after the ruling and some other public patent trolls also saw their stock drop. Couldn't happen to a more deserving group of leeches on innovation.

from the target-practice dept

Some more good news on the patent front. Following the Supreme Court's ruling last month in the Alice v. CLS Bank case, there has been some question about how the lower courts would now look at software patents. As we noted, the Supreme Court's ruling would seem to technically invalidate nearly all software patents by basically saying that if a patent "does no more than require a generic computer to perform generic computer functions" then it's no longer patentable. But that, of course, is basically all that software does. Still, the Supreme Court's ruling also insisted that plenty of software was still patentable, but it didn't give any actual examples.

Now in the first post-Alice ruling on a software patent at CAFC (the appeals court that handles all patent cases, and which is infamous for massively expanding the patentability of software over the years), the court has smacked down a patent held by one of the many (many, many) shell companies of patent trolling giant Acacia. The shell, Digitech Image Technologies, got control of US Patent 6,128,415, which had originally held by Polaroid. The patent supposedly describes a setup for making sure images are consistent on a variety of different devices. Acacia/Digitech did what patent trolls do and basically sued a ton of companies, including NewEgg, Overstock, Xerox, Toshiba, Fujifilm and more.

A lower court kicked out the patent, and now CAFC has upheld that ruling, making use of the Alice ruling to make it doubly clear this isn't patentable. The court doesn't waste too much time, as the ruling is quite short. The key bits:

There is no dispute that the asserted method claims
describe a process. Claims that fall within one of the four
subject matter categories may nevertheless be ineligible if
they encompass laws of nature, physical phenomena, or
abstract ideas..... The Supreme Court recently reaffirmed that fundamental concepts, by themselves, are ineligible abstract ideas. Alice
Corp. v. CLS Bank... In determining whether a process
claim recites an abstract idea, we must examine the claim
as a whole, keeping in mind that an invention is not
ineligible just because it relies upon a law of nature or
mathematical algorithm. As noted by the Supreme Court,
“an application of a law of nature or mathematical formula to a known structure or process may well be deserving
of patent protection.” ... A claim may be eligible if it includes additional inventive features such that the claim scope does
not solely capture the abstract idea.... But a claim reciting an abstract idea
does not become eligible “merely by adding the words
‘apply it.’”

The method in the ’415 patent claims an abstract idea
because it describes a process of organizing information
through mathematical correlations and is not tied to a
specific structure or machine.

[... Discussion of specific claim in the patent ...]

The above claim recites a
process of taking two data sets and combining them into a
single data set, the device profile. The two data sets are
generated by taking existing information—i.e., measured
chromatic stimuli, spatial stimuli, and device response
characteristic functions—and organizing this information
into a new form. The above claim thus recites an ineligible abstract process of gathering and combining data that
does not require input from a physical device. As discussed above, the two data sets and the resulting device
profile are ineligible subject matter. Without additional
limitations, a process that employs mathematical algorithms to manipulate existing information to generate
additional information is not patent eligible. “If a claim is
directed essentially to a method of calculating, using a
mathematical formula, even if the solution is for a specific
purpose, the claimed method is nonstatutory.”

Consider Google's famous PageRank patent, which covers the algorithm at the heart of Google's search engine. In the language of the Federal Circuit, it claims the use of "mathematical algorithms" (involving eigenvectors) to "manipulate existing information" (a list of links between web pages) to "generate additional information" (a ranking of the pages).

The number of software patents out there that use algorithms to manipulate existing information to generate additional information is... rather large. And they may all be invalid.

from the try,-try-again dept

You may recall the important WildTangent v. Ultramercial case that has been going on for some time. This is the case in which the courts basically need to decide if merely adding an "on the internet' turns a basic idea into a patentable idea. In 2010 a court rejected Ultramercial's patent (7,346,545) on a process requiring people to watch an ad before getting access to content. However, the CAFC (court of appeals for the Federal Circuit) overturned that ruling, finding that taking a basic concept and adding "on the internet" to it made it patentable.

In 2012, following the Supreme Court's ruling in the Prometheus Labs v. Mayo case, that found medical diagnostics unpatentable, the Supreme Court told CAFC to try again on the Ultramercial case. Given another chance to get it right, CAFC again whiffed and insisted that this was patentable subject matter. In light of the recent ruling in CLS Bank v. Alice (which relied heavily on that Mayo ruling), the Supreme Court has told CAFC to maybe try one more time to see if it might actually get it right this time around, given the new guidance in the CLS Bank ruling.

In short, the Supreme Court seems to be telling CAFC: do we really need to draw a map for you here? Adding "on the internet" doesn't make something patentable. Now, the remaining question is whether or not CAFC will finally get that message.

Separately, it's also perhaps notable that the Supreme Court declined to hear the appeal in a different ruling, the Accenture v. Guidewire patent case, in which CAFC found the patent invalid based, in large part, on the Mayo ruling and the earlier CLS Bank CAFC ruling. Basically, here was a case where CAFC (properly) rejected a patent for being ridiculously overbroad, and now the Supreme Court doesn't have any concerns with that ruling. But in the Ultramercial case, where CAFC has twice upheld an overly broad patent, the Supreme Court is telling CAFC to try, try again.